TaxTMI 
TaxTMI 
2000 (10) TMI 874
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....-1997 held that inasmuch as the appellant-company failed to appoint Arbitrators as required under the arbitration clause, the appellants should be compelled to furnish a panel of names of arbitrators to the respondent-contractors and one name should be suggested by the appellants. The learned Chief justice had also rejected the plea of the appellants that no reference be made as the matters were 'excepted matters' and held that the question whether the claims related to 'excepted matters' or not was also to be decided by the arbitrators after recording evidence and verifying the facts. The learned solicitor general contends that such an order of the Chief justice deciding rights preliminary points cannot be characterised as an administrative order. 3. Appellant is confronted with the three judge Bench in Konkan Railway Corpn. Ltd. v. Mehul Construction Co. [2000 (6) Scale 71] which has held that no appeal is maintainable under article 136 against such an order passed by the Chief Justice directing appointment of arbitrators under section 11 inasmuch as such orders are administrative in nature even if they contain reasons and decision on certain preliminary issues raised by the par....
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....er side to appoint an arbitrator, etc. It is true that under section 16(1) of the new Act, the arbitrator is now empowered to decide his own jurisdiction including any objection as to the existence or validity of the agreement and for that purpose the arbitration clause is deemed to be independent of the main contract (called Kompetenz- Kompetenz principle). The counsel contends that, it may be that in situations where the matter has straightway gone before an arbitrator by act of parties without intervention of court, the arbitrator is now statutorily empowered to decide these basic questions also. But when a case comes before judicial authority and the defendant pleads that there is an arbitration clause (see section 8 of the new Act) or where, on account of the non-appointment of an arbitrator, the Court is approached for appointment of an arbitrator (see section 11), - the Court can decide these preliminary issues judicially and need not mechanically appoint an arbitrator under section 11 in such cases. The power of the Court has not been taken away by the new Act. It is contended, that this is still the law in all countries where the UNCITRAL model has been adopted. In all suc....
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....2) (pages 407-413), referring to the post-UNCITRAL case-law in France, Austria, Sweden, Belgium, Netherlands, USA etc. to the effect that if the Court is first seized of these preliminary issues before appointment of arbitrator, - even in cases where the arbitrator, under the statute, is empowered to decide these questions - the Court can and will decide these issues first rather than permit the arbitrator to decide them. The experience of the various Courts in these countries where the UNCITRAL model had been adopted long ago is a matter for consideration in India, where we have recently adopted the model. 9. In France, in Caprodag v. Dame Bohin (1995 Rev. Arb. 617) the Court of Appeal has held recently that the arbitrators can decide these questions in cases where the Court is not seized with these questions earlier. This is also so under the 1961 European Convention. Where, however, the matter straightway goes before the arbitrator by act of parties and the arbitrators are first seized of these problems, they can decide but their decisions will still be subject to the decision of the Court. Reference is made by the authors (Fouchard etc.) to the US cases in Comptek Telecom Inc ....
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....r by consent of the arbitrator, to go to Court on jurisdictional issues). Rix J said (p. 70): "This was perhaps a case where the parties might well have come to Court, either by agreement or upon an application from the one side or the other, for the court to determine issues of jurisdiction, on the ground that it was likely to produce substantial savings in cost and that there was good reason why the matter should be decided by the Court." [See also 'A Practical Approach to Arbitration Law by keren Tweeddale and Andrew Tweeddale' (1999) (at p. 79)] It is, therefore, contended that the Chief Justice or his nominee, is, therefore, entitled to decide these issues notwithstanding the arbitrator's 'competence' to decide these issues and if there is a decision, the order deciding rights of parties cannot be 'administrative' but can only be a judicial order amenable to article 136. 10. As to the nature of the order to be passed under section 7 of the International Arbitration Act which deals with reference of disputes falling under the Convention to arbitration, the Federal Court of Australia (New South Wales) in its judgment dated 30-6-1997 held: "Each of these determinations which....
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....e Chief Justice had decided a preliminary issue concerning the existence or otherwise of an arbitration agreement. Learned Solicitor General argued that the judgment of the three judge Bench was not correct in stating that the Chief justice of Guwahati was 'not functioning' as a Court when the said order was passed. A similar question arose in Wellington Associates Ltd. v. Mr. Kirit Mehta [JT 2000 (4) SC 135] (before one of us, Jagannadha Rao, J.) as to the existence of the arbitration clause and after deciding about the competence of the Court and the Kompetenz-Kompetenz principle, the issue was decided as a matter of law by assigning reasons and in fact, it was held that there was no arbitration clause at all. (Of course, in Nimet Resources Inc. v. Essar Steels Ltd. [JT 2000 (Suppl. 1) SC 95], Rajendra Babu, J. while dealing with the question of existence of the contract, referred to the above case in Wellington Associates Ltd. (supra) but felt bound by the three judge Bench in Konkan Railway Corpn.'s case (supra). In yet another case, in Datar Switchgears Ltd. v. Tata Finance Ltd. [Civil Appeal arising out of SLP(C) No. 13812 of 2000 disposed of on 18-10-2000], a question arose ....